Report on Corporate Governance
The Company's governance structure is based on the leadership principles set out in the Code. The core activities of the Board and its Committees are planned on an annual basis and this forms the basic structure within which the Board operates. The Board has adopted formal terms of reference which reflect the principles contained in the Code, and cover the following:
- Strategy - reviewing and agreeing strategy;
- Performance - monitoring the performance of the
Group and also evaluating its own performance; - Standards and values - setting standards and values
to guide the affairs of the Group; - Oversight - ensuring an effective system of internal controls is in place, ensuring that the Board receives timely and accurate information on the performance of the Group and the proper delegation of authority;
and - People - ensuring the Group is managed by individuals with the necessary skills and experience and that appointments to the Board are managed effectively.
The terms of reference also sets out the separate and distinct roles of the Chairman and the Chief Executive.
The Board appoints the Chief Executive and monitors his performance in leading the Company and providing operational and performance management in delivering the agreed strategy. Specifically, he is responsible for developing, for the Board's approval, appropriate values and standards to guide all activities undertaken by the Company.
The approval of acquisitions, for the most part, is a matter reserved for the Board, save that it delegates to the Chief Executive the responsibility for such activities to a specified level of authority. Similarly, there are authority levels covering capital expenditure which can be exercised by the Chief Executive. Beyond these levels of authority, projects are referred to the Board for approval.
Other matters reserved to the Board include treasury policies, internal control, risk management and the appointment or removal of the Company Secretary. The Company maintains appropriate insurance cover with respect to legal action against its Directors.
To ensure that non-Executive Directors can constructively challenge and help proposals on strategy, the Board has adopted a process of reviewing and approving the agreed strategy for the Company on a two yearly basis. In 2010, the Board members undertook a formal strategy development review at the Group's business in Edmonton, Canada. The next strategy meeting will be held in 2012.